Newcomers to defense biz will face ITAR headache

Posted by John McHale

Listening to a presentation today on dealing with International Traffic in Arms Regulations (ITAR) pitfalls for small defense companies, I started thinking this is only going to become more problematic as commercial companies, finding their own markets tanking, try to break into the defense business. The defense industry is one of the few bright spots in this economy and already designers of commercial technology are looking for ways to attract military system integrators to their products.

Today's speaker, Russell VanDegrift, senior consultant and director at MK technology, warned the audience at the Components for Military & Space Electronics conference in San Diego that if they even think their product may be used for military systems they need to clear it with the State Department.

Unfortunately, I think commercial developers are quite naïve on this issue and we might see a more than a few get hit with costly ITAR violations.

VanDegrift also said that any products that may be sold or seen by a foreign government then used for military may come under scrutiny as well -- especially if the other country is China.

I remember last year at our Military & Aerospace Electronics Forum during the ITAR panel discussion engineers and managers kept peppering the panelists with "what if" scenarios -- when in the middle of one exchange someone stood up and said "don't take any chances, just cover your rear end, you don't want to get that letter from the State Department."

Not much has changed since then. The ITAR headache remains for many defense suppliers -- seasoned or not. It is also the only topic our conference advisory board voted to repeat for our 2009 conference.

Watch your step.

Hey Kid! Mean Joe is still the best

By John McHale

Excuse the break from military technology blogs, but I gotta talk about the Steelers Super Bowl win and this year's Super Bowl commercials.

I don't know about you, but I thought the Super Bowl commercials this year pretty much stank -- especially the one that tried to recreate the simple genius of the Mean Joe Greene Coca Cola commercial from 1980.

The commercial featured current Pittsburgh Steeler, Troy Polamalu, in ad for Coke Zero. He basically played the part Greene did, but with a twist that was supposed to be funny, but came off forced. Maybe I'm biased as guy who grew up with Mean Joe and the Steeler dynasty of the 1970s, but I found it dull.

Excuse the pun but leave the classic Coke commercials alone. Mean Joe chugging the Coke, the kid, the shirt toss -- it's perfect.

The outtakes are quite funny too. Rumor has it that Greene downed something like 20 of those bottles in rehearsal. Try chugging one or two yourself and you get the picture...

Every time I see that Greene commercial replayed it makes feel like a kid again... almost as much as watching the Steelers win their 6th Super Bowl!

Best franchise in NFL history and best Super Bowl commercial. There is no doubt.

Laser companies prove to be attractive acquisition targets of prime defense contractors

Laser companies prove to be attractive acquisition target of prime defense contractors

Posted by John Keller

Last fall's acquisition of laser specialist Aculight Corp. of Bothell, Wash., by defense contracting giant Lockheed Martin Corp. of Bethesda, Md., may be an indication that military prime contractors are getting even more serious about developing or acquiring laser and other electro-optical technology expertise.

Laser beans of differing strengths represent one wave of the future in military technology, for the laser represents the way forward for applications, from free-space communications, stealthy sensors, and targeting, as well as a new age of lethal and non-lethal weapons.

Lockheed Martin wrapped up its acquisition of Aculight early last September, and with the acquisition, also acquired pulsed fiber and semiconductor laser expertise in national defense, aerospace, and medical applications, with off-the-shelf, developmental, custom laser systems, contract manufacturing, and fiber and semiconductor laser research.

Aculight has developed lasers for laser radar (LADAR), surveillance, mapping, and nonlinear optics conversion, as well as for infrared countermeasures and other optical warfare applications.

Robert Afzal, vice president of research and development at the new company, Lockheed Martin Aculight, says the acquisition went smoothly and relatively quickly because Aculight was such a natural fit for Lockheed Martin. He made his comments during an informal interview last week at the Photonics West trade show in San Jose, Calif.

No defense company that is interested in staying on the leading edge of technology in the future wants to let its competitors get the upper hand in a technology as promising as lasers. Lockheed Martin showed that with its acquisition of Aculight.

I'll be interested to see if America's prime defense contractors have other laser companies in their acquisition sights later this year.

Superbowl excitement

Posted by Courtney E. Howard

Excitement surrounding Superbowl 43 is palpable -- even if the New England Patriots are sitting this one out. I -- like other Pats fans, I am sure -- am trying to share in the Superbowl excitement, as we look forward to Tom Brady's return next season. The Superbowl is turning out to be a bright spot and an (albeit temporary) diversion from our everyday existence at a time when there isn't much else to celebrate, it seems. When I am out and about, conversations inevitably then turn to the impending big game, even among people who could not care less about football, largely in an attempt to avoid more-depressing talk about the latest unemployment figures, business closings, economic hardships, and the like.

Just as we Pats fans are sitting this Superbowl out, so too are car manufacturers. I, for one, am pleased to see that the auto manufacturers who are benefiting from our tax money (via the last round of bailouts) are not advertising during the Superbowl. After all, the $3 million they would have to shell out for a 30-second spot would be our hard-earned money. I am still bitter about the private jets the executives took to the first hearing, where they then acted contrite and desperate. And the award for best actor goes to....

Have a fantastic Superbowl weekend, and let's hope Bruce "The Boss" Springsteen doesn't suffer a "wardrobe malfunction" at half time. I'm just worried kids will ask, "Who is that guy?" and make me feel even older than I am.

Go [insert favorite team here]!

Kaching!!!

Posted by John McHale

The regulars at my favorite diner this morning are quite excited by the improved prospects of a casino in Massachusetts. A casino in an economic downturn? Seems crazy but ... they say hell yes, because it means more jobs. One gentleman says he thinks people are more likely to place bets when times are tough, in hopes of scoring the big pay out. Desperation pays I guess.

My fellow diners found hope when they learned the elected official who was blocking the slot machines the most -- Massachusetts Speaker of the House of Representatives Salvatore F. DiMasi -- resigned under a cloud of ethics allegations. It was the lead story in the Boston Heraldthis morning, hence the breakfast conversation.

Seems as if the hopes for employment in this liberal state may lie with casinos and defense contractors. Seems an odd paring, but residents are excited about the casino and experts forecast a steady 2009 for the defense industry. The state is home to Raytheon and other major primes have a large presence here as well, including BAE Systems just over the border in Nashua, N.H.

I'm all for the gambling. Maybe they could tax the casinos and leave our income tax alone -- wishful thinking in this state. My fellow commonwealth residents voted against lowering the income tax last fall.

Missing the no income tax, "live free or die" state...

The flub heard 'round the world

Posted by Courtney E. Howard

President Obama had to be sworn in twice this week, due to what is being called "the flub heard 'round the world" by Chief Justice John Roberts. What happened? Perhaps he was nervous about the more than 500,000 people in attendance – reportedly more than during any other inauguration ceremony. Polls reveal that a majority of the American public thought it was "no big deal," but I found it embarrassing. He was reading it, yes? Jeez.

I could be a bit jaded, I admit, however. Ever since the election of 2000, and the finding last year that George W. Bush was not the winner of that election, I am dismayed, disheartened, and a bit disgusted.

President Obama took it all in stride, even cracking a joke to reporters attending the second oath; after all, he has bigger things to worry about, including what is deemed "the in-box from hell." I could have done without the flawed start but after hearing the President’s speech, I am nonetheless optimistic.

Okay, so it wasn’t the most powerful inauguration speech ever heard (a la John F. Kennedy), but I did find it inspiring, thought-provoking, and motivating.

What do you think, about the bungle and the speech?

How much will President Obama spend on defense technology?

Posted by John McHale

The inauguration of Barack Obama is exciting as he is our nation's first black president. It makes me proud to be an American. However, practical questions remain about where he will spend money on defense.

A colleague of mine said he heard that defense spending under the Bush administration increased by about 73 percent. That trend is unlikely to continue under Obama.

In his inaugural address the new president said he will push to turn Iraq over to its own government in about 16 months, while renewing efforts in Afghanistan. However, even with a build-up in Afghanistan it is unlikely defense spending will increase or even continue at current levels.

What does this mean for defense electronics industry? Will less money spent on boots and bullets mean more dollars for research and development?

Will fewer troops on the ground favor funding for embedded electronics in reconnaissance and surveillance applications such as unmanned systems?

Many suppliers I talk to are cautiously optimistic based on their projected backlogs for 2009 and solid funding in the last budget of the Bush Administration. Come January 2010 will things be as positive? Will President Obama make deep cuts in his first defense budget, even canceling large programs such as Future Combat Systems? Or will he just cut back on procurement?

One of my conference advisory board members says he believes that it is republican administrations that cut programs, while democrats just cut back. That they are loathe to eliminate large programs as it could mean eliminating thousands of jobs.

While today was definitely a historic day for change, many defense industry players are nervous about how they will navigate potential changes to their market.

At an Army Aviation press conference I attended in October, one official was asked what funding will be like under Obama or his opponent at the time, John McCain.

He responded "your guess is as good as mine."